MTN Group pre results

The MTN Group is set to release 1H2018 results on the 8th of August 2018.

Top Line estimates

Revenue from data is expected to lead growth within the group while revenue from voice is expected to remain under pressure (as is the sector norm at present). Bloomberg consensus estimates are suggesting revenue for the six month period to be realised at R63.570m and earnings (on an adjusted basis) to come in at around R3.02 per share.

Average Broker Ratings (Institutional View)

MTN remains popular amongst brokers polled by Thompsons Reuters. The long term average rating remains a buy with only three of the thirteen   analysts surveyed considering the stock a sell.

MTN broker ratings

Average Broker Ratings (Institutional View)

MTN remains popular amongst brokers polled by Thomsons Reuters. The long term average rating remains a buy with only three of the thirteen   analysts surveyed considering the stock a sell.

IG CP 07082018

IG Client Positioning (Retail trader View)

The MTN Group remains popular amongst IG clients with 89% of traders holding the stock (as of Tuesday the 7th of August) expecting the price to rise over the near term. 82% of trading activity in the last week amongst IG clients have been buys, while 62% of the last months trading activity on the stock has also been on the buy side.

Further Considerations

There still remains uncertainty relating to the US sanctioning of Iran and the effects that it will have on MTN’s Irancell and the consequences that will relate repatriation of earnings out of the country.

The company has also announced recently that it would be selling its Cyprus telecoms business for a net sale amount of EUR260m, which is to be paid in cash up front.  The deal is part of MTN’s decision to focus exclusively on its operations in Africa and the Middle East. Monaco Telecom (the purchaser) will be allowed to use the MTN brand for another 3 years for a commercial fee. The deal looks to complete in Q3 2018 so will not form part of the earnings reported in 1H2018.

The markets will look to see the progress relating to the company’s proposed Nigerian listing which was originally scheduled for July this year. Expectations for the Nigerian listing are for a market cap valuation in the region of $5bn.

MTN TV 07082018

Technical view

The share price of MTN, has recently broken out of a double bottom reversal pattern marked with the blue “W” on the chart. The break out suggests a short term reversal in the price trend, from down to up. Since the breakout we have seen the price cautiously retracing as we lead into the results on Wednesday the 8th of August. The outcome of the company’s earnings release is likely to determine the success or the failure of the double bottom reversal pattern. The success thereof is expectant of a near term move to resistance considered at 11960. The failure thereof is considered should the share price of MTN instead move to close below 11000 (conservative failure level) or the 10900 level (slightly more aggressive failure level).

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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